Texas Windstorm Claims

Attorneys working in the area of insurance law need to keep up with events happening in the insurance field. The Insurance Journal ran an article recently that may be of interest to some. Here is what it tells us.
The Texas Windstorm Insurance Association (TWIA) announced it has released to a litigator what it calls “potentially offensive” emails as part of discovery in a lawsuit against the insurer brought on behalf of the Brownsville Independent School District.
The lawsuit was filed by a Houston-based attorney over claims from Hurricane Dolly, which made landfall in South Texas in 2008. The attorney has alleged that TWIA employees had used racist language in emails to disparage Hispanics, Arabs and African-American.
“We’re talking about 854 emails, which including attachments amount to a total of 1,671 documents. This represents less than one percent of all documents sent during the three year period covered by the request,” TWIA Media Relations Analyst Alainna Giacone said in a statement released by the association. “More than 60 percent of those emails are innocuous and contain no racial context, but they fit the search requirements because of references to Spanish interpreters, Mexican restaurants, and the like.”
Giacone added: “The remaining emails unfortunately evidence extremely poor taste, displayed in the form of ‘jokes,’ political commentary, and so on. Approximately 10 percent of the emails contain blatantly offensive material. ”
John Polak, general manager of the association, said TWIA’s executive leadership team is “disturbed by and apologize for the sentiments expressed in those messages.”
Polak was not with the organization during the period the emails in question were sent. He was named general manager in March 2012 after having served as interim general manager for about a year.
He said that while TWIA management in 2008 may not have made it clear “that such communications are inappropriate and unacceptable, current TWIA leadership certainly does — and will continue to do so.”
Since 2008, when the majority of the emails in question were sent, most of the executive leadership team at TWIA — and 100 percent of the association’s management in its claims and underwriting departments — has been replaced.
The company said its current team has a broad range of experience in the field of insurance — and is focused on accountability.
“We take the issue of the recently discovered emails seriously. Conduct of this nature is absolutely in stark contrast to our policies and standard of behavior, and these emails are clearly unacceptable,” said Giacone. “We are confident of two things: First, TWIA did not in the years in question — and does not today — come anywhere near displaying a ‘culture of racism,’ as has been alleged by opposing counsel. Second, the handling of claims was not then and is not now compromised by any racist attitudes or actions.”
TWIA currently has strict policies in place prohibiting discrimination of any kind, according to the association’s announcement.
The association said that comprehensive annual employee training on these policies that is regularly conducted in March has been accelerated to the current month in light of the discovery of the past emails. The training emphasizes the fact that offensive conduct is prohibited, specifically outlines proper ways for employees to respond in the event of receiving an offensive email, and details how to report inappropriate conduct.
“TWIA continues to make strides toward creating a culture of diversity and optimum efficiency,” said Polak. “Our staff consists of courteous professionals who come to work each day and do their jobs to the best of their abilities, displaying exemplary attitudes in customer service and treating customers and fellow employees as they themselves wish to be treated.”
In the aftermath of Hurricane Ike in 2008, TWIA came under intense scrutiny by regulators, legislators and the media, mostly due to the handling of its claims processes and financial responsibilities. Its personnel practices were also questioned.
TWIA was placed under the supervision of the Texas Department of Insurance by then Insurance Commissioner Mike Geeslin in early 2011 after regulators determined that TWIA management was not capable of operating the organization “in a safe and sound manner.”
The Houston law firm has tangled with TWIA before. The firm was the lead in hundreds of cases brought against the coastal property insurer following Hurricanes Ike and Dolly in 2008. The law firm has collected tens of millions of dollars in legal fees stemming from those lawsuits.
The Ike claims lawsuits brought by the firm and the associated legal fees raised the ire of then-state Rep. Larry Taylor, an independent agent from Friendswood who was co-chairman of the Joint Windstorm Insurance Legislative Oversight Board, a member of the House Insurance Committee and the the Select Committee on Emergency Preparedness, and the State Representative for House District 24 in Galveston County.
Taylor, now a state senator, has been an outspoken critic of settlements made by TWIA over Ike claims and publicly sparred with the firm over access to information on TWIA settlements.